Constitutional Litigation

You may have gone to pay for a purchase and been told by the store owner that there was an extra charge to pay by credit card. And you’ve undoubtedly gone to a gas station with two sets of prices: lower prices for cash and higher prices for credit cards.

Is there any difference between the two practices? Under Florida law, there is. Under section 501.0117, Florida Statutes, the store owner actually committed a misdemeanor by imposing a “surcharge” for paying by credit card:

A seller or lessor in a sales or lease transaction may not impose a surcharge on the buyer or lessee for electing to use a credit card in lieu of payment by cash, check, or similar means, if the seller or lessor accepts payment by credit card. A surcharge is any additional amount imposed at the time of a sale or lease transaction by the seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit card to make payment.

On the other hand, section 501.0117 says it “does not apply to the offering of a discount for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card…” So it’s perfectly legal for gas stations to have lower cash prices.

In other words, under section 501.0117, businesses may offer a discount for using cash, but may not add an extra charge for using a payment card. Is there any real difference between charging less for not using a payment card (legal) and charging more for using a payment card (illegal)? Or is it merely a semantic difference?

Those are the questions at the heart of the 11th Circuit’s opinion in Dana’s Railroad Supply v. Attorney General, State of Florida, decided November 4, 2015. We’ll get back to the 11th Circuit’s answer, but first some background.

The Campaign Against State Anti-Surcharge Prohibitions

Dana’s is one of a series of lawsuits that have recently been brought by small businesses challenging state law prohibitions on credit card surcharges. Nine states have such laws. A Washington, D.C. law firm known for consumer rights advocacy, Gupta Beck, has filed suits challenging the surcharge prohibitions of the four largest–California, New York, Texas, and Florida–on first amendment grounds.

What’s behind the challenges? While the anti-surcharge statutes may appear, at first glance, to be consumer protection statutes intended to protect consumers from extra charges, the plaintiffs say the laws are actually intended to protect the ability of major credit card issuers (Visa, Mastercard, and American Express) to charge merchants excessive card processing (swipe) fees, which they say are two to three times higher in the U.S. than in other countries.

It was the major credit card issuers that lobbied for anti-surcharge statutes. In the late 1970s and early 1980s, Congress passed a federal anti-surcharge statute, but it expired and was not renewed. After its expiration, the plaintiffs say, the major credit card issuers lobbied state legislatures to pass state laws like section 501.0117.

Until recently, Visa and Mastercard’s merchant agreements prohibited merchants, even in states without statutory prohibitions, from charging customers extra for paying by credit card. But in a class action settlement resolving an antitrust case against the issuers, Visa and Mastercard agreed to remove those prohibitions from their merchant agreements. (The settlement has not yet become final, as certain class members have objected to the settlement. An appeal of the district court’s approval of the settlement is currently pending before the U.S. Court of Appeals for the 2nd Circuit.) But the removal of such provisions in merchant agreements can’t affect merchants’ practices in states where surcharges are still prohibited by statute.

What’s So Bad About Surcharges?

Why would Visa and Mastercard want to ban surcharges? As a matter of economics, the higher prices are, the fewer items consumers tend to buy. So if credit cards are more expensive to use, consumers are less likely to use them.

How do anti-surcharge laws hurt consumers? Merchants must pay credit card processing fees, but can’t charge credit card users directly for the fees. So credit card use raises the merchants’ overall costs. And because they are prohibited from passing on the costs of credit card processing directly to credit card users, the charges are instead reflected in higher prices charged to all customers to cover the costs.

(For example, suppose 50% of a merchant’s customers use credit cards and the merchant is charged 4% per transaction. With surcharges allowed, the merchant could charge 4% extra to the credit card users to cover the processing. With surcharges prohibited, the merchant must charge all customers 2% higher prices to cover the processing fee.) In this sense, anti-surcharge laws help one group of customers (credit card users) at the expense of another group (cash-paying customers). That transfer is magnified due to the prevalence of rewards cards (which often cost merchants the most to process), as cash customers are essentially paying (through higher prices merchants must charge across the board to cover credit card processing) for the rewards a subset of customers receive for using their credit cards.

But in another sense, anti-surcharge prohibitions hurt all consumers, as well as all merchants. They do so by increasing credit card usage, which leads to higher merchant costs, which lead to higher prices across the board.

And they do so by allowing Visa and Mastercard to charge higher processing fees than they otherwise could. Due to the lack of surcharges, consumers don’t know how much of the price of the items they buy is attributable to credit card processing charges (just as they don’t know what portion of an item’s price is attributable other items of overhead), so consumers, the card companies’ customers, don’t put any pressure on card issuers to charge lower transaction fees.

But recall that while merchants can impose surcharges for using credit cards, they can offer cash discounts. Why wouldn’t allowing merchants to give discounts for cash-paying customers have the same effect as allowing merchants to charge credit card users a surcharge? According to the merchants (and the economics research on which they rely), consumer behavior is more likely to change to avoid a loss than to avoid missing out on a benefit. So if paying with a credit card results in a surcharge (a loss), consumers will be less likely to choose to use a credit card than if paying with a credit card simply means missing out on a cash discount (a potential gain).

Speech or Conduct?

The challenges to anti-surcharge statutes are premised on the assertion that those statutes regulate speech, rather than conduct. That is because the 1st Amendment only applies to speech.

Structuring a transaction is generally thought to be conduct, not speech, and many statutes regulate such activities without any suggestion that they are regulating speech. So how is section 501.0117’s prohibition on surcharges any different?

According to the 11th Circuit, section 501.0117 doesn’t prohibit the conduct it appears at first glance to govern, which the court characterized as “dual pricing,” i.e., charging higher prices to credit card users than to cash buyers. That can’t be the function of the statute because it allows cash discounts, which are the functional equivalent of credit card surcharges.

Presuming that the statute must do something, the court pondered whether it might prohibit surcharges that are not disclosed before the transaction occurs. But it concluded that conduct could not be what the statute prohibits, due to the language of section 501.0117 as well as because it is already prohibited by another statute.

If the statute doesn’t prohibit dual-pricing, and prohibits “surcharges” but not “discounts,” then its focus can only be on speech, i.e., the words merchants may use to describe the fact that consumers must pay extra to use a credit card. Merchants are allowed to call higher credit card prices standard prices, and lower cash prices “discounts,” but are prohibited from calling cash prices standard and credit card prices “surcharges.”

But whether you call the lower price a discount and the other price standard or call one price standard and the other a surcharge doesn’t change the conduct, only the words used to describe it. So section 501.0117 regulates–and prohibits–certain speech. The court analogized the statute to a state law prohibiting restaurants from serving half-empty glasses of water but permitting them to serve half-full glasses.

Once finding that the statute regulates speech rather than conduct, it was not a large jump to conclude that it violates the 1st Amendment. The 1st Amendment allows some leeway for the government to regulate commercial speech. But commercial speech restrictions must relate to “misleading or related to unlawful activity,” the government must have a substantial interest at stake, and the regulation must advance that interest, in a way that does not prohibit more speech than necessary.

Given the court’s understanding of section 501.0117 as merely regulating semantics, telling merchants words they can and can’t use to describe dual pricing, it followed that section 501.0117 could not past muster. Arguably, the statute actually requires misleading speech rather than prohibiting it. The reason for dual pricing, after all, is to allow the merchant to charge more (surcharge) for credit card transactions to pay for the credit card processing fees.

Will Credit Card Surcharges Become the Norm?

For now, it would seem that merchants in Florida are free to impose surcharges for credit card transactions. But it remains to be seen whether this decision will have any real effect on the marketplace.

There’s also a chance the November decision may not be the final word. In the case challenging New York’s anti-surcharge law, the 2nd Circuit unanimously rejected the argument that the statute regulated speech.

And Judge Carnes reached the same conclusion about section 501.0117 in his vigorous dissent from the 11th Circuit’s decision in Dana’s. So there’s a non-trivial possibility that the 11th Circuit might reconsider the case en banc, or even that the Supreme Court might review it, if requested.

There’s no denying that public opinion on the dangerousness of cannabis has changed dramatically in recent years. Florida has not taken the steps that some states have taken to legalize cannabis for medical purposes, let alone for general use. But there’s evidence of a change in public opinion in Florida as well.

Florida has legalized “Charlotte’s Web,” a low-THC version of cannabis, for use by patients with certain serious medical conditions. And although a 2014 ballot initiative to legalize marijuana for medical use failed to reach the 60% threshold necessary for enactment, it did garner the majority of the vote (with more than 57% in favor), reflecting that Floridians’ attitudes are changing along with the rest of the country.

Is this changing public opinion impacting judicial decision-making? The February 20, 2015 decision of Florida’s Fifth District Court of Appeal in Agresta v. City of Maitland, gives a hint that that it may be. At issue in Agresta was whether forfeiture of a house used to cultivate cannabis violated the Excessive Fines Clause of the Eighth Amendment to the U.S. Constitution.

Under the Florida Contraband Forfeiture Act, property used in the commission of a crime can be seized. But the 8th Amendment to the U.S. Constitution limits seizure of property, in that it prohibits “excessive fines.”

Joseph Farley (now deceased; the appellant, Agresta, was the representative of Farley’s estate) was convicted of cultivating cannabis in a house he owned in in Maitland and of stealing electricity in doing so, as well as of misdemeanor possession of cannabis. After the convictions, the City of Maitland filed suit to seize his house, which was within 1,000 feet of a school. The trial court ordered the house forfeited to the city.

On appeal, Agresta argued that seizing the house was unconstitutionally excessive and disproportionate to Farley’s crimes. A majority of the 5th DCA panel agreed.

The key issue in the case was the extent of harm caused by Farley’s crimes. To the majority, the main factor was that he had pleaded guilty to crimes for which the maximum monetary punishment was an $11,000 fine. Farley’s house, on the other hand, was valued at between $238,000 and $295,000. 

In the majority’s view, there was no basis to punish Farley with a forfeiture of property that was worth much more than the maximum fine he could have faced. Society’s valuation of the harmfulness of the crimes was critical, and “consideration of the fines approved by the legislature indicates the monetary value society places on the harmful conduct.” 

So it was improper to impose on Farley a forfeiture of property with a much greater value than the maximum fine. In what may (or may not) be a reflection of changing societal views on the harmfulness of marijuana, the majority stated that there was “no evidence that Farley caused harm beyond his commission of the offenses underlying his convictions.” (It’s impossible to know whether the judges in the majority would have reached a different conclusion if Farley had been convicted of using the house to manufacture some other type of illegal drug.)   

a consideration of the fines
approved by the legislature indicates the monetary value society places on the harmful
conduct.

One need look no further than Judge Berger’s dissenting opinion in Agresta to see a much harsher view of the harmfulness of Farley’s conduct, and a resulting contrasting conclusion. Part of Judge Berger’s disagreement with the majority was over whether to consider not only the crimes for which Farley was convicted (by way of a plea deal), but also the crimes with which he was originally charged.

But part her disagreement with the majority appears to have been based on her view of the harmfulness of Farley’s crime of cultivating cannabis:

In determining the harm caused by the defendant, we cannot ignore the public safety concerns posed by trafficking in drugs….While the actual harm Farley caused may not be able to be quantified, the potential harm caused by the magnitude of his enterprise is certainly great and cannot be discounted….Farley was a drug grower, cultivator, and dealer who used the property forfeited solely for the purpose of continuing his criminal enterprise.

Accordingly, Judge Berger did not feel seizure of the house to be grossly disproportionate to the crime, despite the disparity between the value of the house and the maximum fine Farley could have faced for the crimes of which he was convicted.

Cultivation and possession of cannabis, (except for Charlotte’s Web in very limited circumstances), of course, remains illegal under Florida law as well as under federal law. Judges will undoubtedly continue to faithfully apply the law as written, even when it’s unpopular to do so. But there are times when public opinion can impact legal analysis (such as in determining the monetary value society places on the harmfulness of a crime, as in Agresta), so if public opinion continues to change regarding cannabis, it will be no surprise to see effects on appellate courts’ jurisprudence. 

There’s been considerable teeth gnashing about a 2013 Florida law allowing politicians to hold their assets in blind trusts, and withhold from public disclosure specification of the assets held in those trusts. But the debate is only theoretical at this point, according to Florida’s First District Court of Appeal. For that reason, in its opinion issued today in Apthorp v. Detzner, the 1st DCA punted on the merits of a challenge to the constitutionality of the blind trust provisions.

Apthorp was an aide to former Governor Rubin Askew, who pushed the passage of the Sunshine Amendment, the first successful ballot initiative in Florida, which is now Article II, section 8 of the Florida Constitution. Among other things, the Sunshine Amendment requires full disclosure by public office-holders of their financial interests, to avoid conflicts of interest in their decision-making. With financial holdings public, if a politician voted in a way that benefitted his/her financial interests, that fact would be known to the public and subject to public scrutiny.  

In 2013, the Florida legislature passed section 112.31425, Florida Statutes, which allows public officials to hold their assets in “qualified blind trusts,” for ostensibly the same purpose — to avoid conflicts of interest. A statewide grand jury convened in 2010 had recommended the use of blind trusts for that purpose.

A public office-holder uses a blind trust by placing his/her money with a manager who has full power to buy and sell assets. In theory, then, the public office-holder would not know whether a decision affects his/her financial interests because he/she doesn’t know the identity of the companies in which the assets of the trust are currently invested.

According to the legislature, “if a public officer creates a trust and does not control the interests held by the trust, his or her official actions will not be influenced or appear to be influenced by private considerations.” Correspondingly, the legislature permitted public office-holders to publicly disclose only the total value of the assets held in a blind trust, and not the individual investments of the blind trust.

Apthorp apparently did not see the blind trust provisions as a positive development. He saw the blind trust reporting provisions as a way for public office-holders to essentially hold on to the assets and avoid public disclosure. Soon after the new provisions were enacted, Apthorp sought to block candidates from taking advantage of them by filing a Petition for Writ of Mandamus to the Supreme Court of Florida.

When the Supreme Court ruled that the case should be heard in circuit court, Apthorp sought a declaratory judgment from the circuit court that the blind trust provisions violated the Sunshine Amendment. The trial court ruled that they do not.

Apthorp challenged that ruling on appeal. But the 1st DCA didn’t reach the constitutional issue. Instead, the 1st DCA vacated the trial court’s declaratory judgment after finding that the trial court lacked jurisdiction to entertain the case at all because there was no justiciable controversy.

A bedrock principle of the court system is that courts are constitutionally empowered only to decide actual disputes between the parties. With few exceptions, courts don’t have jurisdiction to issue “advisory opinions,” i.e., to say how they would rule if a certain set of circumstances were presented to them. The plaintiff must assert an actual controversy: that the defendant violated (or is currently violating) the law, that the plaintiff has been injured by the alleged violation, and must seek redress for the alleged injury.

Suits for declaratory judgment are somewhat of an anomoly because they seek a declaration about a future action — before anyone has been harmed — rather than relief for an injury caused by a past or present harm. For example, in a common type of suit for declaratory judgment, an insurer seeks a declaration that its contract doesn’t require it to cover certain damages. That contrasts with the more traditional paradigm suit, in which, for example, an insured might sue the insurer after it had refused to cover damages, claiming the insurer had breached the contract in doing so.

But there are limits to courts’ ability to hear declaratory judgment suits as well, the 1st DCA explained. Under the Florida Supreme Court’s decision in Martinez v. Scanlan, 582 So. 2d 1167 (Fla. 1991), there must still be an actual controversy, “a bona fide, actual, present practical need for the declaration…” (Applying this principle to the insurer’s declaratory judgment suit, there’s a need for a declaration because there’s a present dispute between the insurer and insured over whether the insurer is required to pay for the damages. But if, for example, an insurer sought a declaration that a certain provision in its contract doesn’t require it to ever cover a certain type of damages, without reference to specific damages incurred by a specific insured, under Martinez, there would appear to be no actual present need for a declaratory judgment.)     

The 1st DCA held that there was no actual present need for a declaration regarding the constitutionality of the blind trust provisions because no candidate or public office-holder had yet sought to take advantage of those provisions. “Not only has no public officer ever used the type of ‘qualified blind trust’ authorized by the statute Apthorp is challenging, but his brief concedes that he knows of no constitutional officer or candidate who incorporated a blind trust in the most recent financial statements.” Until that happened, there would be no justiciable question for the court to decide, only a theoretical issue that might arise in the future.

Because it found the courts lacked jurisdiction to decide the issue, the 1st DCA vacated the trial court’s judgment as improperly entered, leaving the constitutional question open for challenge in a later case. In a special concurrence, Judge Thomas emphasized that the opinion should not be read to take a position on the constitutional issue, and hinted that he saw potential constitutional problems. But that issue will need to await a case in which the concerns are not merely theoretical.   

The Supreme Court of the United States has agreed to step in to resolve a long-running dispute between Florida and Georgia. As noted in my previous post, it is the second Florida case on the Supreme Court’s docket this term that involves Florida’s commercial fishing industry.

Profound economic implications are at stake for each state.

For Georgia, the outcome could determine the sustainability of continued growth of the state’s largest metropolitan area. For Florida, the outcome may impact the economic prospects of commercial fishermen and a region of the panhandle.

Environmental concerns are also in play. Hanging in the balance is the welfare of a biodiverse natural area, protected species of mussels, and spawning grounds for Gulf sturgeon, a threatened species.

Apalachicola vs. Atlanta

As is true of many disputes between states, water rights are at issue in Florida v. Georgia. More specifically, the dispute centers around Georgia’s consumption of water from the Chattahoochee River (as well as Lake Lanier, which feeds the Chattahoochee) and the Flint River. Both rivers flow south from the Atlanta area before converging near the Georgia-Florida border to form the Apalachicola River:     

ACF Region.jpgFrom there, the Apalachicola River flows south through the Florida panhandle into the Apalachicola Bay and the Gulf of Mexico. Due in significant part to freshwater inflow from the river, the Apalachicola River and Apalachicola Bay are rich in biodiversity, so much so that the bay and a large section of the river and its floodplain have been designated a National Estuarine Research Reserve.

Among the many wildlife species making their homes in the Apalachicola Bay are endangered and threatened species of mussels. The bay also serves as spawning habitat for Gulf Sturgeon, a threatened species.

And the inflow of fresh water from the Apalachicola River has made the Apalachicola Bay fertile breeding ground for oysters. Historically, the bay has been Florida’s prime location for commercial oyster harvesting.

But that has changed in recent years. Oyster harvests were down 60% in 2013, leading the U.S. Secretary of Commerce to declare a commercial fishery failure. This year, the Florida Fish and Wildlife Conservation Commission (FWC) has implemented severe restrictions on harvesting, and is considering closing the oyster harvest in the bay altogether.

The loss of oysters in Apalachicola Bay coincides with decreasing inflows from the Apalachicola River, resulting in increased salinity in the bay, making conditions less favorable for oysters. According to Florida, the decreased inflow is the result of Georgia taking more than its fair share of water upstream, resulting in smaller quantities of water flowing downstream.

As the Atlanta metropolitan area has grown, Georgia has steadily increased consumption of water that would otherwise flow from the Chattahoochee and Flint Rivers into the Apalachicola River and Bay. But Georgia denies that its consumption has harmed the Apalachicola. In opposing Florida’s request for the Court to hear the case, Georgia asserted that Florida’s real issue is with the Army Corps of Engineers, which controls water releases upstream dams. It also said the decreased flow to the Apalachicola is attributable to droughts in recent years, not Georgia’s consumption of water.

The dispute has been building since 1989, when the Army Corps of Engineers first proposed allocating more water to Georgia. Georgia, Florida, and Alabama reached temporary agreements for water use to maintain an uneasy status quo for a time. It was followed by litigation involving (but not directly between) all three states, the Army Corps of Engineers, and a group of power customers that buy power generated from a dam on Lake Lanier.

Finally, in 2013, Florida opted to sue Georgia directly, and asked the Supreme Court to intervene. With the Supreme Court’s recent decision to accept the case, Florida will now get its day in court. By extension, so will the Apalachicola Bay and its commercial oyster fishing industry.

Not Your Typical Supreme Court Case

Florida v. Georgia is an original proceeding, which means the Supreme Court will be the first and last court to address the dispute. In most cases, the Supreme Court serves as an appellate court reviewing the decision of a lower appellate court. It generally decides purely legal issues, with facts developed long before a case reaches the Supreme Court.

Disputes between states are a different animal. Under Article III, Clause 2 of the United States Constitution, in “all Cases…in which a State shall be a Party, the Supreme Court shall have original Jurisdiction.” Based on that constitutional provision, Congress has enacted 28 U.S.C. section 1251(a), under which the Supreme Court’s jurisdiction is exclusive (meaning it is the only court in which suit may be brought) in any suit in which one state is suing another.

But the Supreme Court has discretion to decide whether such a suit is appropriate for resolution by the Court. A state wishing to sue another state must ask the Court for permission to file its complaint, which Florida did in October 2013.

Before deciding whether to take Florida’s case, the Supreme Court asked the Solicitor General of the United States (the federal government’s Supreme Court counsel) for its views on whether the case should be accepted. Although the Solicitor General suggested waiting to hear the dispute until after the Army Corps of Engineers has revised its own procedures, the Supreme Court decided that the case should be heard now.

The litigation will now begin in earnest, beginning with Georgia filing an answer to the complaint. Because the Supreme Court is not a trial court generally engaged in deciding disputed facts, the Court generally appoints a special master to conduct initial proceedings. The special master prepares a report, with findings and recommendations, either party can object to the report, and the Supreme Court reviews the special master’s report, considers any objections, and issues an opinion.

Ultimately, the question for the Supreme Court is how to equitably apportion the rivers’ water. In other words, it will decide the fairest way to allocate water among the states’ competing interests. That decision will affect the future of natural resources, industry, and citizens of both states.

It is not easy to get the Supreme Court of Florida to hear a case. That is by design: the Florida Constitution was amended in 1980 to curtail the Supreme Court’s jurisdiction so that it may only review a limited number of cases that fall into discrete categories. 

But the Court has a catch-all jurisdictional authority known as “All Writs” jurisdiction. All Writs jurisdiction is derived from Article V, Section 3(b)(7) of the Florida Constitution, which allows the Florida Supreme Court to “issue all writs necessary to complete exercise of its jurisdiction.”     

This constitutional provision has traditionally been interpreted narrowly. It has been understood to confer something akin to supplemental jurisdiction, rather than an independent basis for jurisdiction, and is invoked only in rare cases. 

But disputes involving exceptionally important issues with great time sensitivity appear to fall into the category of rare cases in which the Florida Supreme Court is willing to invoke its All Writs power. In The League of Women Voters of Florida v. Data Targeting, Inc., released May 27, 2014, the Florida Supreme Court was asked to weigh in in a pre-trial dispute in litigation over whether the 2012 apportionment of Florida’s congressional districts was designed to advance partisan political objectives in violation of the Fair District Amendments to the Florida Constitution.  

A week before trial was to begin, the trial judge ruled that documents obtained from a political consultant, which the plaintiffs wanted to use to show that political consultants participated in the redistricting process, could be used as evidence in the trial but would remain confidential. On appeal, the First DCA issued a short order ruling that the documents could not be admitted into evidence, and stating that it would issue an opinion explaining its reasoning.

The plaintiffs filed an emergency petition asking the Florida Supreme Court to stay the 1st DCA’s order so that the evidence could be presented at the trial and the trial court could decide the dispute with the aid of that evidence before the 2014 midterm elections. With the trial about to begin, the Court would need to act immediately if its decision was going to have any impact.

But while the Court said it had reason to believe it would have jurisdiction to review the 1st DCA’s decision, it could not be certain as yet.  Because the First DCA had not explained its reasoning in a full opinion, the Florida Supreme Court could not determine whether it had jurisdiction to hear the petition under its more commonly used bases, such as when there are conflicting rulings between districts on a point of law.

Nonetheless, the Court predicted that the district court opinion was likely to construe a provision of the Florida or federal constitution. And it noted that the Court had previously exercised jurisdiction in the same case based on the direct effect on a class of constitutional officers, but said that it could not say for sure whether jurisdicition to review the 1st DCA’s decision on the admissibility of the documents could be obtained on that basis. In addition, there was a chance that the 1st DCA would certify a question of great public importance, given “the statewide importance of this litigation and the lack of Florida precedent regarding the associational privilege,” which the 1st DCA appeared to have relied on based on its citation to a 9th Circuit case addressing that issue.

Although the All Writs doctrine does not prove an independent basis for jurisdiction, the Supreme Court explained, “this Court may utilize the constitutional all writs provision as a means of ‘protecting jurisdiction that likely will be invoked in the future.'” Thus, due to the likelihood that the Supreme Court would have jurisdiction, and that it would not be able to provide effective relief by exercising jurisdiction after the 1st DCA issued its opinion (and the trial likely already completed, the Supreme Court held that it was appropriate to stay the 1st DCA’s order under the All Writs doctrine:

In order to maintain the status quo during the ongoing trial, preserve this Court’s ability to completely exercise the eventual jurisdiction it is likely to have to review the First District’s decision, and prevent any irreparable harm that might occur if the Petitioners are prevented from using the challenged documents, we conclude that we must grant the petition and stay the enforcement of the First District’s reversal of the circuit court, pending the completion of the trial.

Justice Lewis issued a concurring opinion to explain his view that the litigation’s importance to the “democratic system of government in Florida–and public faith in that system,” combined with the fact that the Court had to act now in order to issue effective relief, made the case a rare instance in which All Writs jurisdiction was appropriate. Chief Justice Polston dissented in an opinion joined by Justice Canady, explaining that in his view it was inappropriate to exercise All Writs jurisdiction because “an independent basis for jurisdiction does not currently exist.”

The 1st DCA apparently agreed that the Florida Supreme Court should review the case. As a twist, the 1st DCA’s opinion never came. Before the Supreme Court issued its decision, a 1st DCA judge had filed an internal motion for the court to review the panel’s order en banc. A majority of the judges ultimately voted to grant en banc review, and ruled that “the appeal should have been passed through to the supreme court,” as had been requested.

The court vacated the prior order and certified an issue of great public importance for immediate review by the Florida Supreme Court. And the Florida Supreme Court has accepted jurisdiction.

Meanwhile, the trial has ended, and the trial court has ruled on the merits. Although the ruling invalidated 2 congressional districts, the legislature has announced that it does not intend to appeal.

But the legislature has also asked that the congressional districts not be redrawn until after the 2014 midterm elections. Will the Florida Supreme Court have jurisdiction if it asked to rule on whether the map must be redrawn before the midterms? Given the importance of the issues and the time sensitivity, that seems likely.  

 

Gun rights advocates received a big win in Florida’s First District Court of Appeal on December 10, 2013. The 1st DCA took the unusual step of issuing seven separate opinions to explain the result.

Guns.jpg

Sitting en banc in Florida Carry, Inc. v. University of North Florida, the 1st DCA voted 12-3 to reverse the dismissal of a suit challenging the University of North Florida’s policy of prohibiting students from keeping firearms in their vehicles on campus. Judge Padovano, joined by Judges Van Nortwick and Clark, dissented.

The Facts

The suit was brought by Florida Carry, an advocacy group, and Alexandria Lainez, a UNF student, challenging a UNF policy that prohibited storage of a “weapon or destructive device,” including a gun, in a vehicle on UNF property, and subjected students to punishment and possible prosecution for violating that policy. Florida Carry argued that UNF has no power to regulate firearms, because by virtue of section 790.33(1), Florida Statutes, the Florida Legislature has “preempted the field” of firearms regulation, i.e., reserved for itself the exclusive right to regulate firearms in Florida. 

The Primary Issue: Is UNF a School District?

On the surface, the appeal required only the resolution of a straightforward question of statutory construction. UNF argued, and the trial court agreed, that despite the legislature’s reservation of the power to regulate firearms, it had delegated to UNF the power to regulate possession of firearms in parking lots on campus.

Under Section 790.115(2)(a)(3) and 790.25(5), the legislature declared that it is generally unlawful to carry firearms on school grounds, with certain exceptions, including carrying a firearm or other weapon in a vehicle if the weapon is “securely encased”: 

it is lawful…for a person 18 years of age or older to possess a concealed firearm or other weapon for self-defense or other lawful purpose within the interior of a private conveyance, without a license, if the firearm or other weapon is securely encased or is otherwise not readily accessible for immediate use…This subsection shall be liberally construed in favor of the lawful use, ownership, and possession of firearms and other weapons, including lawful self-defense…  

But Section 790.115(2)(a)(3) also gives “school districts” the power to “adopt written and published policies that waive” the exception allowing weapons in vehicles “for purposes of student and campus parking privileges.” So the primary issue was whether UNF is a “school district,” such that the legislature delegated to UNF the power to adopt a policy declining the privilege of carrying secured firearms in vehicles in UNF parking lots.

As a matter of statutory interpretation, the 1st DCA judges all agreed that UNF did not meet the definition of a “school district,” such that the legislature did not grant to UNF the power to waive firearms-in-vehicles exception. But that conclusion was not the end of the analysis.

The Tipsy Coachman Doctrine

 A fundamental aspect of appellate practice is that a party seeking to reverse (overturn) a lower court’s decision must confine his/her/its arguments to the issues and arguments that were raised before the lower court. In other words, the court of appeals will reverse a lower court only if it incorrectly ruled on the arguments that were presented to it, but will not fault a lower court for not making a different ruling that might have been mandated by a legal principle that the lower court did not have the opportunity to consider.

But the same is not true when it comes to affirming a lower court’s decision. Under a doctrine known in Florida jurisprudence as the “tipsy coachman” rule (so named based on a poem about a coach driver that reached the correct destination despite not knowing where he was going), an appellate court will affirm the lower court’s decision, even if the lower court’s reasons for reaching its decision were wrong, if the decision was correct for another reason. In other words, if the court of appeals concludes that the correct result was reached for the wrong reasons, the decision will be upheld.

Why So Many Opinions?

The tipsy coachman doctrine played a major role in causing the proliferation of separate opinions in Florida Carry. Judge Padovano concluded in his dissent that the trial court was correct to conclude that UNF had the power to regulate firearms on campus based on a different reason than the one argued by UNF and accepted by the trial court.

The correct reason for the result, Judge Padovano concluded, was the fact that article IX, section 7 of the Florida Constitution confers the powers to “operate, regulate, control, and be fully responsible for the management of the whole university system,” on the Board of Governors of the state university system.

He further concluded that UNF’s regulation, enacted through state universities’ constitutional power to regulate themselves, could not be trumped by the Legislature’s enactment of Section 790.115. Just as “a university has the power to prohibit a student from smoking in a dormitory or drinking an alcoholic beverage on campus even though smoking and drinking may be perfectly lawful in other circumstances,” it has the power to prohibit students from carrying a firearm in a vehicle, even though doing so is legal in other circumstances.

The numerosity of concurring opinions resulted mainly from disagreements among the judges who concurred in the court’s decision to reverse the trial court about how to address the tipsy coachman argument raised by Judge Padovano.

The majority opinion, authored by Judge Roberts, concludes that the power granted to universities under article IX, section 7 does not extend to the power to “deprive students attending UNF of their constitutional right to bear arms as provided by organic law and legislative enactment,” and that the right to bear arms can only be regulated by the Legislature.

Judge Wetherell wrote separately to express the view that the majority and dissent’s discussions of the constitutional powers of state universities is misguided, because the Constitution grants power to the Board of Governors, not universities, and there was no indication that the Board had delegated its power to UNF to pass the regulation at issue. Judge Makar wrote a concurring opinion “to emphasize that Florida’s legal history on the right to keep and bear arms makes this a straightforward case.” He also emphasized that whatever powers universities may have must be tempered by constitutional and legislative limitations.

In his concurrence, Judge Osterhaus departed from the majority’s decision to address Judge Padovano’s analysis of universities’ powers under article IX, section 7 because UNF based its regulation on the power it believed it had under Section 790.115, so that is the only lens through which its powers should be analyzed. Thus, in his view, the tipsy coachman rule did not apply.

Still other opinions resulted from judges wanting to emphasize that the court’s ruling was not the end of the story, and that despite the decision, UNF may still have the power to regulate firearms on campus. Judge Swanson expressed the view that UNF may have the power to regulate firearms on campus under a separate statutory delegation of power, but would have to follow certain procedures to do so. And Judge Benton wrote separately to emphasize that the court’s decision did not mean that “all UNF rules and administrative regulations regarding firearms are null and void.”

What Now?

None of the 1st DCA’s many opinions is likely to be the last word on the issues in the case, which seems almost certainly destined for review by the Supreme Court of Florida. If nothing else, the injection of the analysis of constitutional powers into the case created a basis for the Supreme Court to exercise jurisdiction. Given the public interest in and votality of issues of Second Amendment Rights, my guess is that the Supreme Court will not hesitate to take it up.              

Florida’s acupuncture physicians and massage therapists recently learned that they are (again) ineligible to be paid PIP benefits for treating automobile accident victims. Chiropractors learned that PIP coverage of their services has (again) been curtailed as well. But the changes may be temporary. 

They resulted from a loss suffered by acupuncture physicians, massage therapists, and chiropractors in their court battle against implementation of the 2012 PIP Act amendments to Florida’s No-Fault insurance law, a/k/a PIP. Among other things, the 2012 PIP Act excludes acupuncture and massage therapy from PIP, and limits coverage of chiropractic treatment. Those provisions of the 2012 PIP Act had been put on hold due to a preliminary injunction entered by the Leon County Circuit Court.  

The First District Court of Appeal set aside the preliminary injunction in its October 23, 2013 decision in McCarty v. Myers. But in appellate court decisions, as in many areas of life, the devil is often in the details. And the 1st DCA’s reasoning for overturning the injunction left room for acupuncture physicians, massage therapists, and chiropractors (and their patients) to be optimistic that their efforts to prevent the amendments from being implemented may eventually be successful.

Why? Because the decision came down to who was suing, not the merits of the claims. The litigation was brought by a group of practitioners who have banded together and hired attorneys to sue to block the 2012 PIP Act from going into effect.

Named as plaintiffs were three providers: an acupuncture physician, a chiropractic physician, and a massage therapist. Also named as a plaintiff was “Jane Doe,” who apparently is not a real person, but a fictitious person who was supposed to be a representive of “all those citizens of Florida that are, were, or will be injured as a result of a motor vehicle collision that were also required to purchase $10,000 . . . of PIP insurance coverage but may actually only receive no or $2,500 . . . in benefits.” 

Under the doctrine of “standing,” a person or entity can sue only to seek relief for an injury that he/she/it suffered. Conversely, a person lacks standing to bring a legal claim to enforce the rights of others or of the general public.

The provider plaintiffs asserted that the 2012 PIP Act violated several provisions of the Florida Constitution. In entering the injunction, the trial court seized on one of those asserted constitutional violations, finding that there was a significant possibility that the 2012 PIP Act was unconstitutional for denying to persons injured in accidents the constitutional right of access to courts.   

The problem with entering an injunction based on that claim, according to the 1st DCA, was not that the claim itself lacked merit, but that that the plaintiffs did not have standing to bring it. The plaintiffs were providers, not accident victims, so they were not injured by the asserted denial of access to courts. Even if they may have been injured in a different way, i.e., by losing revenue, the providers did not claim that they themselves had been denied access to courts, so they did not have standing to sue on that claim, or to obtain an injunction based on it — at least not “[w]ithout a showing of an actual denial of access to courts in a specific factual context…”

In a footnote, the court cast doubt on whether the providers could sue under a limited exception to general standing rules, in which a third party may have standing to remedy the rights of a person who is unable to pursue his/her own rights. But the court did not address whether the providers could sue as assignees of accident victims, as providers have done in other contexts–it is common for providers to have their patients assign their insurance benefits to the provider–apparently because the plaintiffs did not claim to have standing as assignees. 

The 1st DCA left open several options for the plaintiffs to continue to pursue their efforts to block implementation of the 2012 PIP Act. Chief among them would be to join as additional plaintiffs some injured patients who have had PIP coverage of acupunture, massage therapy, and chiropractic care denied due to the 2012 PIP Act, i.e., plaintiffs that suffered the asserted injury of being denied access to the courts. Barring that, it may be a viable option for the providers to continue as the only plaintiffs, but as assignees of their patients.

Either way, it seems likely that the providers will be able to find a way to overcome the issue of standing, and ultimately to obtain another injunction. Of course, it is possible that 1st DCA would reverse on the merits if a new injunction is entered and appealed. But its October 23, 2013 decision gives no indication that the court views the claims as unmeritorious.   

Issuing its opinion in DMT vs. TMH, a closely watched case that drew national attention, the Supreme Court of Florida today declared that a woman has constitutionally protected rights to raise a child created by artificial insemination using her ovum, with the fertilized ovum carried and the child born by her then-committed partner, and initially raised by the woman and her former partner. Justice Pariente wrote the opinion for the Court, with Justice Polston writing a dissenting opinion in which two other justices joined.

The facts are these. DMT and TMH were in a committed lesbian relationship for about 11 years. They decided to have a child by in vitro fertilization, using TMH’s ova fertilized by donated sperm, with the fertilized ova implanted in DMT. DMT gave birth to the child and DMT and TMH raised the child together as equal parents, initially in the home they shared. DMT and TMH, who could not marry in Florida, split up about 17 months after the child was born. They initially continued to co-parent the child after the split, agreeing that the child would divide time between their homes. But things turned nasty, and DMT ran away with the child and denied TMH any contact with the child.

TMH finally found DMT in Australia. She sued DMT to establish her right to co-parent the child. The problem for TMH was that section 742.14, Florida Statutes, which deals with surrogacy, extinguishes the parental rights of egg and sperm donors to  children created from their donated genetic material. The trial court found that section 742.14 was controlling, and ruled in favor of DMT, despite stating that DMT’s actions were morally reprehensible and against the interests of the child.

The Fifth District Court of Appeal (in Daytona Beach, which hears appeals from portions of central and northern Florida) reversed the trial court, holding that section 742.14 did not apply, finding TMH was not a “donor” under the statute because she did not intend to give her ova away (i.e. to “donate” it), but rather always intended to raise any child that resulted from her egg, even though she wouldn’t be carrying and giving birth to the child. 

The majority of the Florida Supreme Court rejected that interpretation. It held that section 742.14 did apply, because whether someone is considered a “donor” under the statute doesn’t depend on what her intentions were, but rather only on whether she gave genetic material. That conclusion was compelled by statutory language as well as practical considerations. If intentions matter, then any sperm or egg donor could say that he/she didn’t really intend to give up the child, and thus avoid the effect of the statute, which aims to prevent drawn out custody battles over children created from donated eggs and/or sperm.

But the the majority agreed with the 5th DCA’s result, based on a more monumental, and potentially farther reaching, basis. They found that the statute was unconstitutional as applied to the circumstances in DMT, in that TMH not only contributed genetic material, but also took on the responsibility for raising the child after it was born. Thus, her situation was analogous to an unmarried father of a child, which courts have held has inchoate parental rights that become constitutionally protected if the father takes on the responsibilities of raising the child.

Denying parental rights to an individual in TMH’s circumstances, the majority held, violates the Due Process, Privacy, and Equal Protection clauses of the Florida Constitution, as well as the Due Process and Equal Protection clauses of the United States Constitution.

Not surprisingly, the United States Supreme Court’s decision in United States v. Windsor, 133 S. Ct. 2675 (2013), in which the Court declared Title II of the Defense of Marriage Act to be unconstitutional by denying Equal Protection to gay married couples, figured prominently in the Florida Supreme Court’s constitutional analysis in DMT.

But the Court also based its decision on the Florida Constitution (in addition to the United States Constitution), and was careful to point out that its finding that the Florida Constitution was violated was “separate” from its finding that the United States Constitution was violated. In doing so, the Court likely insulated its decision from further review by the United Supreme Court. The Florida Supreme Court has the last word in interpreting the provisions of the Florida Constitution, and the United States Supreme Court generally does not involve itself in cases in which there is an independent state law basis for the decision, even if federal issues are also decided.

The Court further insulated its decision from review by the United States Supreme Court by grounding its decision on the Privacy clause in the Florida Constitution, which has been held to provide broader protection of privacy rights, including parental rights, than is provided by the United States Constitution. (Unlike the Florida Constitution, the U.S. Constitution does not have an explicit privacy clause, although privacy is addressed in the context of searches and seizures, and has been held to be implied by the Due Process clause.) So the Florida Supreme Court’s interpretation of the United States Constitution (as well as of the Florida Constitution) as protecting the parental rights of women in TMH’s position is likely to stand.  

In the past few years, the strangest things have started appearing in appellate decisions: images. That has been seen as so revolutionary that it has been widely covered in the legal press, with 7th Circuit opinions authored by Judge Richard Posner (as is often the case) drawing the most attention. The question is: why are judges now inserting images into their opinions?

The answer may be that astute judges are responding to the changing environment in which their opinions are being read. Appellate court opinions have been accessible online for years, and they are now more commonly read on “screens” — computers, iPads/tablets, and smartphones — than in books. And studies have shown that we read differently when looking at a screen than when looking at printed text on paper.

For example, here’s how scientists say our eyes track the data on a webpage:

http://www.usability.gov/images/fpattern.JPG

Notice the concentration of red on the left hand border of the page created by the eye searching down the page for its structure. Note also how the eye tends to skip around.

Astute legal writers — especially appellate lawyers — would be wise to take note of how different the reading experience is on a screen, and to take it into account when drafting court submissions. That point was persuasively made during a presentation at the Florida Conference of District Court of Appeal Judges last fall (which I and other members of the Florida Bar’s Appellate Practice Section were fortunate enough to attend).

Judges (and their clerks) are increasingly reading appellate briefs and other court submissions on computer screens, and when travelling, on iPads, Kindles and other e-readers, or on smartphones. (An informal survey during another presentation at the conference revealed Florida appellate judges to be tech-savvy and partial to iPhones and iPads, although Android phones were also represented).

The trend toward screen-reading will only increase now that e-filing is replacing paper filing.

In order for an appellate brief or any piece of legal writing to be persuasive, it must command the reader’s attention. And to get and keep a reader’s attention when he or she is reading on a screen, attorneys need to adopt the format of their documents to fit the environment.

How? In much the same way as one makes a webpage easy to read and engaging. Here are some suggestions:

  • Add spacing — Text is easier to read when it is surrounded by white space. Increase margins.  Large block paragraphs extending from margin to margin are a relic of book reading. They are difficult to digest when read on a screen, particularly when read on a Kindle or similar e-reader.
  • Shorten the paragraphs. Not only do shorter paragraphs make the document more palatable to the eye (and increase white space), but they also account for the attention span issues that have been engendered by the digital age.
  • Use headings more liberally. Effective headings are alot like soundbites — they grab the reader’s attention and drive home the point quickly before that attention is lost. Hopefully, they also encourage the reader to continue to read and pay attention.
  • Insert document bookmarks. If you’ve opened a .pdf of a recent Florida Supreme Court opinion, you may have noticed a menu bar on the left hand side mapping out the sections of the opinion. Document bookmarks help the reader to get a feel for the overall structure of the document. They also help the reader to easily navigate between sections and arguments. When the reader must scroll up and down the screen to find sections, a traditional table of contents is a much less helpful roadmap than a bookmarks bar, where the reader can click right on the section he or she is looking for.

And finally there’s the most radical idea: illustration with images. This practice is the most obvious concession to the effect the internet and it remains relatively unorthodox and somewhat controversial. So a fair amount of tact and judgment is needed.

But when used appropriately, tactfully, and sparingly, images can be highly effective. (If the picture is worth 1000 words, it can also help to make the brief shorter, which judges always appreciate). If nothing else, images command attention. Just ask Judge Posner. 

As by now you may have heard, in a move that defied the pundits and the odds-makers, the Supreme Court of the United States upheld the Constitutionality of the Patient Protection and Affordable Care Act. 

Here’s a link to the opinion. Chief Justice ROBERTS joined Justices GINSBURG, BREYER, SOTOMAYOR, and KAGAN in holding that the individual mandate, under which individuals must either maintain a certain amount of insurance coverage or pay a fee to federal government, is a valid exercise of Congress’ power to tax and spend. Congress called the fee a penalty for political reasons, but the government argued in court that it was no different than a tax.

At the same time, a majority of the Court, including Justice Roberts, held that Congress’ powers under the Commerce Clause, which is the power Congress relies on for most of the laws it enacts, do not extend to passing laws like the individual mandate. In other words, a majority of the Court accepted the “broccoli” argument that Congress cannot force an individual to purchase a product he/she doesn’t want.

Here are my initial reactions:

(1) You might say this outcome is a lesson not to read too much into how oral argument goes, given that so many people came away from oral argument with the impression that the Court would strike down the ACA. But I wouldn’t read too much into it. From the oral argument transcript, it was pretty clear that Justice Roberts was the most likely of the more conservative justices to vote to uphold the law. At the very least, how 8 of the 9 justices felt about the issues was, in fact, obvious from oral argument.

(2) Although the decision’s impact for this case is obviously a “win” for Congress, it may well be that the impact on future cases is the opposite. The Court’s commerce clause analysis is likely to provide plenty of fodder for challenges to future laws passed under Congress’ commerce clause power.So while this is obviously not an immediate win for the small government camp, it may turn out to be one in the long run.